Thursday, February 28, 2013

Gold, Silver and Miners Remain Junk Grade Investments

Since silver and gold topped in 2011 investors have been struggling with these positions hoping this cyclical bull market for metals continues. The simple truth is no one knows for sure if prices will continue and make new highs and those who say its a for sure thing we all know deep down is full of bull crap.

All investments move in cycles, waves or trends which ever you want to call it. The market has 4 simple yet distinct stages each require a completely different skill set and trading tactics to navigate.

Stage 1 – After a period of decline a stock consolidates at a contracted price range as buyers step into the market and fight for control over the exhausted sellers. Price action is neutral as sellers exit their positions and buyers begin to accumulate the stock.

Stage 2 – Upon gaining control of price movement, buyers overwhelm sellers and a stock enters a period of higher highs and higher lows. A bull market begins and the path of least resistance is higher. Traders should aggressively trade the long side, taking advantage of any pullback or dips in the stock’s price.

Stage 3 – After a prolonged increase in share price the buyers now become exhausted and the sellers again move in. This period of consolidation and distribution produces neutral price action and precedes a decline in the stock’s price.

Stage 4 – When the lows of Stage 3 are breached a stock enters a decline as sellers overwhelm buyers. A pattern of lower highs and lower lows emerges as a stock enters a bear market. A well positioned trader would be aggressively trading the short side and taking advantage of the often quick declines in the stock’s price. More times than not all of stage 2 gains are given back in a short period of time.

Stages

Now that you know the stages and what it looks like its time to review the gold, silver and miners charts.

Gold Chart – Weekly

Gold has been in a bull market for several years but is starting to show its age in terms of the size of the price patterns, volume levels and extreme bullish sentiment. Back in 2011 a week before price topped we exited precious metals because the short term charts and volume levels were warning of a sharp drop. Since then I have not done many trades in either gold or silver because I do not like shorting in bull markets. Waiting for a bullish setup/price pattern before getting involved is my focus.

Gold has pulled back with a bullish 5 wave correction the last 5 months and at key support. While the long term charts are pointing to higher gold prices you must be aware that if gold and silver start to breakdown things will likely get ugly quickly. To be honest I do not care which way it goes, I just want it to either rally from support here and make new highs or breakdown and crash. Both will be very profitable if traded properly.

Gold

Silver Chart – Weekly

Silver has a very similar chart to that of its big sister (yellow gold). This shiny metal has the energy of a 3 year old making it a very volatile investment. I have touched on the topic of gold and silver being so called safe havens and if you have been reading my work for a while you know that any investment that can move 18-45% in value within 1 month is NOT a safe haven.

While it has done well in the past decade and boosted a lot of retirement accounts the day will come with these things collapse and most people holding them will give back most if not all the gains they had simply because people get attached to large positions and most do not know when to just exit a position.

Silver

Gold Miners Chart – Monthly

This chart gives me cold sweats because I know how many people own gold mining stocks and I know how fast these things can move. If the price closed below the green support line the bottom could fall out and be very painful for those who get paralyzed by denial and do nothing but watch their accounts lose value week after week.

Miners

Precious Metals Investing Conclusion:

In short, this report is to show you the very basics of how investments move in stages. It is also to show a warning that precious metals are technically very close to a major breakdown which the big money players are watching closely. This thinly traded sector can move extremely fast when everyone rushes for the door.

Do not get me wrong, I am not saying a crash is about to happen, actually it’s the opposite. All I am doing is planning the idea in your subconscious so that if prices continue to move lower you will remember that these price levels and take action with your investments. Remember, you can always buy the investment back at any time again if the outlook changes in a week, month or year.

Just click here to get My FREE Weekly Gold, Silver and Mining Reports and Trade with the Stages

Chris Vermeulen

Wednesday, February 27, 2013

Playing the ABC Gap fill for swing trading entry at ATP

From guest analyst David Banister....

One of my favorite “Crowd Behavioral” patterns is the ABC Gap fill pattern. This is a normal correction pattern in the stock market that works off overbought sentiment. You can apply this to liquid individual stocks in most cases, and look ahead to spot potential entries on your watch list for trading.

A sample we will use today is KORS, a fast growth stock of the leading luxury retailer Michael Kors. We notified our subscribers several days in advance to watch for a gap fill at $57 on this stock before entering a long trade. We also spotted what looked like a classic C wave pattern coming down from a B wave interim top.

Sure enough it took several days but the stock worked its way down to $57 and hit the gap on the nose on February 26th. It immediately reversed to end the day $2.25 higher or about 4-5% swing gains on this pattern. The chart below shows a 1, 2, 3, and 4 pattern with ABC making up the 4 pattern on KORS stock.

ATPfeb27


At ATP, we look for ABC and other patterns in growth plays and swing trade them long for reversals, just as the crowd of traders has stopped out and gone sour on the stock. Consider joining us by learning more at The Active Trading Partners.com



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Tuesday, February 26, 2013

Gold, Copper, and Crude Oil Forecasted the Recent Selloff in the S&P 500

Nobody better in the industry at understanding herd mentality then the staff at The Technical Traders. And of course they have been telling us it would be like this.....you just have to know which herd to watch and when.....

For the past several weeks, everywhere I looked all I could find was bullish articles. After the fiscal cliff was patched at the last second, prices surged into the 2013 and have since climbed higher all the way into late February.

I warned members of my service that this runaway move to the upside which was characterized by a slow grinding move higher on excessively low volume and low volatility would eventually end violently. I do not have a crystal ball, this is just based on my experience as a trader over the years.

Unfortunately when markets run higher for a long period of time and just keep grinding shorts what typically follows is a violent selloff. I warned members that when the selloff showed up, it was likely that weeks of positive returns would be destroyed in a matter of days.

The price action in the S&P 500 Index since February 20th has erased most of the gains that were created in the entire month of February already and lower prices are possible, if not likely. However, there are opportunities to learn from this recent price action.

There were several warning signs over the past few weeks that were indicating that a risk-off type of environment was around the corner. As a trader, I am constantly monitoring the price action in a variety of futures contracts in equities, currencies, metals, energy, and agriculture to name a few.

Besides looking for trading opportunities, it is important to monitor the price action in commodities even if you only trade equities. In many cases, commodity volatility will occur immediately prior to equity volatility. Ultimately the recent rally was no different.

As an example, metals were showing major weakness overall with both gold and silver selling off violently. However, what caught my eye even further was the dramatic selloff in copper futures which is shown below.

Copper Futures Daily Chart

Chart1

As can be seen above, copper futures had rallied along with equities since the lows back in November. However, prices peaked in copper at the beginning of February and a move lower from 3.7845 on 02/04 down to recent lows around 3.5195 on 02/25 resulted in roughly a 7% decline in copper prices over a 3 week period.

As stated above, commodity volatility often precedes equity volatility. As can be seen above, copper futures appear to be reversing during the action today and many times commodities will bottom ahead of equities.

I want to be clear in stating that equities will not necessarily mirror the action in commodities or copper specifically, but some major volatility was seen in several commodity contracts besides just metals. Oil futures were also coming under selling pressure as well.

Crude Oil Futures Daily Chart

Chart2

As can be seen above, oil futures topped right at the end of January and then sold off briefly only to selloff sharply lower a few weeks later. Oil futures gave back roughly 6% – 7% as well which is quite similar to copper’s recent correction. I have simply highlighted some key support / resistance levels on the oil futures chart for future reference and for possible price targets.

In equity terms, since February 20th the S&P 500 futures have sold off from a high of around 1,529 to Monday’s low of 1481.75. Thus far we are seeing a move lower of about 3.10% since 02/20 in the S&P 500 E-Mini futures contract. While I am not calling for perfect correlation with commodities, I do believe that a 5% correction here not only makes sense, but actually would be healthy for equities.

S&P 500 E-Mini Futures Daily Chart

Chart3

If we assume the S&P 500 E-Mini contracts were to lose 5% from their recent highs, the price that would correspond with that type of move would be around 1,453.

As shown above, while 1,453 does represent a consolidation zone in the S&P 500 which occurred in the beginning of January of 2013, there is a major support level that corresponds with the 1,460 – 1,470 price range.

I am expecting to see the S&P 500 test the 1,460 – 1,470 price range in the futures contract, however the outcome at that support level will be important for future price action. If that level holds, I think we likely reverse and move higher and we could even take out recent highs potentially. In contrast, if we see a major breakdown below 1,460 I believe things could get interesting quickly for the bears.

I am watching the price action today closely as I am interested in what kind of retracement we will get based on yesterday’s large bullish engulfing candlestick on the daily chart of the S&P 500 futures.

Ultimately if the retracement remains below the .500 Fibonacci Retracement area into the bell we could see some stronger selling pressure setting in later this week. The Fibonacci retracement of the 02/25 candlestick can be seen below.

S&P 500 E-Mini Futures Hourly Chart

Chart4

So far today we have not been able to crack the 0.382 Fibonacci retracement area. This is generally considered a relatively weak retracement and can precede a strong reversal which in this case would be to the downside in coming days.

It is always possible to see strength on Wednesday and a move up to the .500 retracement level. As long as price stays under the .500 Fibonacci retracement level, I think the bears will remain in control in the short-term. However, should we see the highs from 02/25 taken out in the near term the bulls will be in complete control again.

Right now I think it is early to be getting long unless a trader is looking to scale in on the way down. I think the more logical price level to watch carefully is down around 1,460 – 1,470 on the S&P 500. If that level is tested, the resulting price action will be critical in shaping the intermediate and long-term price action in the broad equity indexes.

If you have to trade, keep position sizes small and define your risk. Risk is elevated at this time.

If you would like to get our detailed trading videos each week and know what is just around the corner test out here:

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Chris Vermeulen & JW Jones
The "Traders Video Playbook"


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Monday, February 25, 2013

Question & Answer Per Your Request

I just received an email from trading legend, Todd Mitchell, that his PowerStock Mentoring Program is filling up.

That's pretty remarkable considering he just started accepting new students last week. But questions remain and he fired up his computer camera with his partners Doc and Dave, and answered all your questions.

I'm not sure if it's Todd's 100%, one year Performance Guarantee, the fact you get ALL of his highly coveted stock trading strategies, or that he's making himself personally available to you. Including giving them his cell phone number. I think that's what has so many traders excited.

Either way, I'm sure it's only a matter of a couple of days before the entire course is sold out. But before you enroll in PowerStock Trading, click here to check out this 5 minute video he just created.

It's answers the 3 most popular questions about the course and how you can personally get in contact with Todd for additional questions.

Watch the 5 Minute Question & Answer Video Here

Saturday, February 23, 2013

GOLD Should be Completing a Cyclical Low in February

David A. Banister of Market Trend Forecast has been our go to trader when it comes to gold. Here's what he says about the bottoming process in gold.....

Over the past 5 calendar years we have seen GOLD either complete an intermediate cyclical top or bottom in each February. My forecast was for February of 2013 to be no different and for Gold and Silver to make trough lows this month. With that said, I did not expect the drop in GOLD to go much below $1,620 per ounce at worst, but in fact it has. Where does that leave us now on the technical patterns and crowd behavioral views?

First let’s examine the last 5 years and you can see how I noted tops and bottoms in the chart below

ATP1


That brings us forward to todays $1,573 spot pricing and trying to determine where the next move will go. To help with that end, some of our work centers on Elliott Wave Theory, along with fundamentals and traditional technical patterns of course.

In this case, the recent action around Gold has been very difficult to ascertain, and I will be the first to admit as much. With that said, one pattern we can surmise is a rare pattern Elliott termed the “Double Three” pattern. Essentially you have two ABC type moves, and in the middle what is dubbed an “X” wave, which breaks up the ABC’s on each end of the pattern.

That brings us forward to todays $1,573 spot pricing and trying to determine where the next move will go. To help with that end, some of our work centers on Elliott Wave Theory, along with fundamentals and traditional technical patterns of course. In this case, the recent action around Gold has been very difficult to ascertain, and I will be the first to admit as much. With that said, one pattern we can surmise is a rare pattern Elliott termed the “Double Three” pattern.

Essentially you have two ABC type moves, and in the middle what is dubbed an “X” wave, which breaks up the ABC’s on each end of the pattern. For sure, if we add in traditional technical indicators along with sentiment, we can see very oversold levels coupled with the potential Double Three pattern and probably start getting long here for a trade back to the 1650’s as possible....

ATP2


Obviously this chart shows oversold readings in the lower right corner using the CCI indicator. That said we would like to see 1550 hold on a weekly closing basis to remain optimistic for a strong rebound.

Consider our free weekly reports or a 33% discount, just click here and go to Market Trend Forecast


Thursday, February 21, 2013

Gold and Silver Nearing MAJOR Long Term Support

Gold and silver along with their related miners have been under a lot of selling pressure the last few months. Prices have fallen far enough to make most traders and investors start to panic and close out their long term positions which is a bullish signal in my opinion.

My trading tactic for both swing trading and day trading thrive on entering and exiting positions when panic trading hits an investment. General rule of thumb is to buy when others are extremely fearful and cannot hold on to a losing position any longer. When they are selling I am usually slowly accumulating a long position.

Looking at the charts below of gold and silver you can see the strong selling over the past two weeks. When you get drops this sharp investors tend to focus on their account statements watching the value drop at an accelerated rate to the point where they ignore the charts and just liquidate everything they have to preserve their capital.

Gold Bullion Weekly Chart: 

The price and outlook of gold has not really changed much in the past year. It remains in a major bull market and has been taking a breather, nothing more. Stepping back and reviewing the weekly chart it’s clear that gold is nearing long term support. With panic selling hitting the gold market and long term support only $20 - $30 dollars away this investment starts to look really tasty.

But if price breaks below the $1540 level and closed down there on a weekly basis then all bets are off as this would trigger a wave of selling that would make the recent selling look insignificant. And the uptrend in gold would now be over.



Silver Bullion Weekly Chart:

Silver price is in the same boat as its big sister (Yellow Gold). Only difference is that silver has larger price swings of 2-3x more than gold. This is what attracts more traders and investors but unfortunately the masses do not know how to manage leveraged investments like this and end up losing their shirts. A breakdown below the $26.11 price would likely trigger a sharp drop back down to the $17.50 level so be careful.



Gold Mining Stocks – Monthly Chart:

If you wanna see a scary chart then look at what could happen or is happening to gold miner stocks. This very could be happening as we speak and why I have been pounding the table for months no to get long gold, silver or miners until we see complete panic selling or a bullish basing pattern form on the charts. We have not seen either of these things take place although panic selling is slowly ramping up this week.

There will be some very frustrated gold bugs if they take another 33% hair cut in value.



Precious Metals Trend and Trading Conclusion:

In short, the precious metal sector remains in a cyclical bull market. That being said and looking at the daily charts the prices have been consolidating and are in a down trend currently. Until we see some type of bottoming pattern or price action form it is best to sit on the side lines and watch the emotional traders get caught up and do the wrong thing.

The next two weeks will be crucial for gold, silver and miner stocks. If metals cannot find support and close below the key support levels things could get really ugly fast. If you would like to receive my daily analysis and know what I am trading then check out my newsletter at The Gold& Oil Guy.com

Chris Vermeulen


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Wednesday, February 20, 2013

Real Trading Strategies and Mentoring is Here....PowerStock Trading is Live

Legendary trading mentor, Todd Mitchell, just opened his PowerStock 2.0 Mentoring Program for the very first time this year. He’s doing things with stock trading that most people have never even heard of.

Todd limits the size of the program so Watch this presentation and get signed up today!

There’s a reason why many fund managers, professional Wall Street traders and lifelong day traders have come to Todd to help them improve their trading. And, for a limited time, you too can benefit from this one of a kind mentoring program.

But don't wait, act fast because people are piling in and he will be closing enrollment down in approximately a week. Click here and let Todd explain all the details.

Finally, get your hands on a proven, robust trading methodology that just makes perfect sense. There’s nothing better than to be mentored by someone that really knows what they’re talking about and knows how to explain advanced trading in simple language. Todd is making himself personally available to you and you get his unprecedented one year, 100% money back performance guarantee.

2013 is the year you change your trading success....Get PowerStock 2.0 Mentoring Live


Saturday, February 16, 2013

New Video....the "Paid Pullback" Strategy

All the stock trading strategies you're using aren't producing the type of results you had hoped, are they? Sure, you thought it would. So called gurus told you how well those strategies performed and if you tried it, you'd be rich beyond your wildest dreams.

But was it a lie. Not totally, no, because some stock trading strategies do work. But those strategies that are producing consistent results are few and far between.

So you'll be happy to know, we have found that "needle in a haystack", And I don't say that lightly. But I just finished watching a trade presentation that I'm confident will make a big difference in the way you trade.

And unlike what you might expect for a strategy like this, you get complete access for absolutely no cost whatsoever.

We are talking about buying your stocks at wholesale prices instead of the retail prices everyone else has to pay. And we're not talking about buying your stock at a lower limit price.

This is part of a series and this video will only be up for about 48 hours.So watch it now....

Watch > "The Paid Pullback Strategy"


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Wednesday, February 13, 2013

A Better Method to Choose Stocks.....in 15 Seconds

When a big time fund manager makes it a daily practice to sit down with his staff to review the trading techniques from these guys....you have to wonder why.

But I've gotta say, after watching this presentation on how to select the highest probability stocks for the strongest expansion moves, now I know why these guys have been the "go to" people behind several Wall Street Pros and huge dollar market makers.

But you want to know the best part? They've just created a free video giving away their entire stock selection strategy. Trust me, this is really good stuff.

Watch it today since this presentation won't be up for about 48 hours. Stop everything you're doing and watch it before you miss out.

Inside this rare presentation, you not only get their proprietary stock selection strategy for narrowing down over 7,000 candidates to just under a dozen of the highest probability stocks in 15 seconds, they're also blowing the whistle on a dirty Wall Street secret that's intentionally designed to keep you in the dark.

Click here to watch this presentation right now.

Monday, February 11, 2013

Trading has changed.....But this has worked for DECADES!

Ever since mid 2000, stock traders everywhere are wondering, "what the heck happened?"

We had the internet bubble, 9-11 terrorist attack, housing crash .... and now we're staring in the eyes of a so called national debt crises not to mention all the volatility and periods of sideways trading...

Making money as a stock trader has been hard......Well, for most people that is.

You see, there are some people who are making consistent profits and they have been doing it for decades.

No, it's not some new fancy trading scheme. They are actually basing it on little known trading methodologies that have been around for over 100 years.

And taking the proven strategies that have worked for decades and perfecting them for today's environment.

In fact, today's presentation will tell you all about it.

Just click here to watch the free presentation "The Renegade Trader"

See you in the markets,

Ray C. Parrish
President/CEO
The Stocks Market Club



Thursday, February 7, 2013

Are you using our..... Perfect ETF Portfolio?

We created the Perfect ETF Portfolio over five years ago to help thousand of MarketClub members who have IRA and retirement accounts. Like anyone who has a retirement account, our members were looking for a way to protect and grow their capital, while eliminating as many future market uncertainties as possible.
The concept and main mantra behind the Perfect ETF Portfolio was simplicity itself. "DO NOT LET THE MARKET EAT YOUR NEST EGG".

Over the course of five of the toughest years that most money managers and hedge fund traders can recall, the Perfect ETF Portfolio kept chugging along producing steady returns.


The Perfect ETF Portfolio has statistically outperformed the S&P 500 for the past five years by a factor of 5 to 1. We think that's a remarkable achievement given the uncertainty and volatility of the world today.
Let me share with you a clear example of how two investors would have fared over a five year period.

Investor 1 - invests $1,000 in the S&P 500 at the end of 2007.

Investor 2 - invests $1,000 in the Perfect ETF Portfolio at the exact same time.

At the end of five years, Investor 1 has $926.43 and has lost money. Investor 2 on the other hand, sees his initial investment grow to $1,448.52 during that same time frame. Moral of the story is a buy and hold strategy like Investor 1 used is not a viable strategy in today's investment world.


Now let's be clear, the Perfect ETF Portfolio is not going to double your money overnight, nor is it going to lose 38% of your capital in one year, like what happened to the SP500 index in 2008.

The Perfect ETF Portfolio is meant for your conservative money, that's the money that is meant to sweeten your retirement. It is the money you will need when you retire from whatever you are doing now. The Perfect ETF Portfolio is designed to make sure that your future retirement plans in 10, 20 or even 30 years from now, are not put on hold due to under-performing assets.

MarketClub members have access to the Perfect ETF Portfolio, plus MarketClub's two other model portfolios, the World Cup Portfolio and the Global Strategy Portfolio.

All of MarketClub's model portfolios are easy to track, and we provide members with possible entry and exit signals before they occur. It is then your job to place the clear and concise orders with your broker.

If you are not yet a member of MarketClub, we invite you to try the service for 30 days, for just $8.95. You'll have access to all of MarketClub's online trading tools, as well as access to all three model portfolios. This offer is good until the end of February.

Click here for 30 full days of access to MarketClub for just $8.95



Wednesday, February 6, 2013

The Anatomy of an XOM Earnings Trade

If you have been following our trading partner J.W. Jones on his Apple options trades you'll want to take a minute to see how he uses the same methods to trade SMC favorite ExxonMobil [XOM].........

One of the most interesting aspects of options is the myriad opportunities presented for high probability trades for those who understand the details of option behavior.

For example, I have recently discussed the routinely observed collapse of implied volatility immediately following an earnings release. We have looked at several examples of profitable trades constructed to benefit from this expected decline in implied volatility.

Today I would like to review another group of trades based on a fundamental characteristic of option pricing. In order to understand this phenomenon, we need to review briefly the anatomy of the price of an option.

Remember that an option’s price, while quoted as a pair of bid / ask values, is in reality the sum of two components. The current market price is the combination of the extrinsic and intrinsic components of the individual option contract.

The extrinsic component can comprise the entirety or only a variable portion of the market price of an option. All options contain at least a small amount of extrinsic component.

The intrinsic component of an option may comprise the majority of the value of an option, as for example a "deep in the money" option. Conversely, an individual "out of the money" option routinely contains no intrinsic value whatsoever.

Here is an example of the trades and the charts to go with them.



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Monday, February 4, 2013

So, what is an "Elephant Trade"

I just got word of John Carter putting on an exclusive free event this week where he's teaching ALL of his best swing trading techniques and tricks and I for one won't miss it.

Just click here to get details and seat reservations

John's also going to teach his exclusive "elephant trade" technique....the one that's helped him work on his golf game while paying for his kids college!

The event is FREE and will be Wednesday evening at 8 p.m. and all you have to do is sign up.

See you in the markets and we'll see you Wednesday evening,

Ray @ The Stock Market Club

Friday, February 1, 2013

Update on Todd's RHT Trade and A New JOY Global Long Trade

In today’s video SMC contributor Todd Mitchel show us where he is trailing his stop up to lock in more profits in the RHT (Red Hat, Inc.) stock trade, which by the way is doing exactly what he said it would do. He will then discuss another long stock trade (JOY = Joy Global, Inc.) that he put on yesterday afternoon at 63.21.

This trade is working out very nicely too.....80% of the first profit objective has already been hit at 65.17 (+1.96 point profit per share already) – and now his trailing stop has already been moved up to 63.60 locking in .39. So, regardless what JOY does from here, he came out way ahead and the trade is a winner. Be sure to watch the entire video for all the details and have a fantastic weekend!

Watch "Update on Todd's RHT Trade and A New JOY Global Long"


20 Survival Skills for the Trader